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UPDATE: UBS Downgrades Cliffs Natural Resources (CLF) to Neutral; Tests Indicate Risk to Dividend

September 6, 2012 7:16 AM EDT Send to a Friend
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Price: $15.07 +0.07%

Rating Summary:
    4 Buy, 15 Hold, 8 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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(Updated - September 6, 2012 11:08 AM EDT)

UBS downgraded Cliffs Natural Resources (NYSE: CLF) from Buy to Neutral. PT slashes from $58 to $35.

Analyst, Shneur Z. Gershuni, said, "At current spot prices, $90/t CFR China, we see risk to CLF’s >7% dividend as iron ore has fallen $45/t in 3 mos. Chromite capex is now difficult to justify and we hope this project is suspended. Unless spot improves, we see CLF needing to cut its dividend to the prior level and suspending Chromite capex while still coming close to breaching covenants. We do not believe a continuation at current spot is fully priced in, hence our near-term cautious view. The house view is for pricing to re-rate higher in 4Q; however, CLF will likely be range bound until then."

FY12 EPS estimate lowered from $5.27 to $5.01 and FY13 from $6.44 to $5.24.
For an analyst ratings summary and ratings history on Cliffs Natural Resources click here. For more ratings news on Cliffs Natural Resources click here.

Shares of Cliffs Natural Resources closed at $34.72 yesterday.




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Analyst EPS Change, Analyst EPS View, Analyst PT Change, Downgrades

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UBS, Dividend

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